EEP: Analyst Meeting

SHARON LUI, Wells Fargo (10/07/2010)
"Enbridge's analyst meeting in New York focused primarily on parent company Enbridge Inc. (ENB); however, we gleaned several data points relevant to the MLP. (1) EEP's Line 6B and 6A pipelines were successfully restarted on 9/27 and 9/17, respectively; (2) Management reiterated its long-term annual distribution growth forecast of 2%–5% and does not believe the incremental costs/potential fines associated with the Line 6B/6A spills will impact this growth target; (3) Fundamentals for EEP's liquids business remain favorable with drilling activity accelerating in both the Canadian oil sands and the Bakken Shale of North Dakota; and (4) management anticipates volumes at Elk City could benefit from an immediate uplift following the integration of the assets into EEP's Anadarko system.

We are lowering our 2010 and 2011 DCF per unit estimates by 1%–2% to reflect the net impact of: (1) incremental costs associated with EEP's Line 6A oil spill; (2) our revised commodity price deck; and (3) the partnership's recent $400M senior notes offering. There is no change to our 2010 or 2011 distribution-per-unit estimates of $4.09 and $4.17, respectively, which represent 3.2% and 2.1% of YOY growth."

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